Genstar Capital Announces Agreement to Sell Netsmart Technologies, Inc.

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Mar 23, 2016, 08:04 ET

SAN FRANCISCO, March 23, 2016 /PRNewswire/ -- Genstar Capital, a leading middle-market private equity firm focused on investments in targeted segments of the healthcare, software, financial services, and industrial technology industries, today announced the signing of a definitive agreement to sell Netsmart Technologies, Inc., a leading supplier of enterprise software and software as a service (SaaS) solutions for health and human services providers, to GI Partners.

GI Partners is acquiring Netsmart in partnership with Allscripts Healthcare Solutions, Inc. (NASDAQ: MDRX), which will merge its Allscripts' homecare software business unit with Netsmart to firmly establish Netsmart as the largest human services and post-acute technology provider in healthcare.

Netsmart is currently the largest healthcare IT company serving the health and human services sector, the third largest category of spend in healthcare which includes behavioral health, public health, child / family services and substance abuse sectors. The company provides software solutions that support integrated, coordinated delivery of health services across the spectrum of care. More than 23,000 customer organizations, including over 450,000 care providers and more than 40 state systems, use Netsmart solutions to help improve the quality of life for more than 25 million people each day.

Roman Margolin, Principal at Genstar, said, "Similar to our recently announced sale of ERT, our successful investment in Netsmart is another example of our focused effort on the healthcare technology sector and helping drive growth to create market leading businesses. After recruiting Mike Valentine as CEO, he helped us set a new bar for Netsmart as well as its broader market. Together, we invested in new product development, enhanced Netsmart's technology and cloud capabilities, built the sales and marketing teams, and complemented existing offerings with several strategic add-on acquisitions. As a result of these and other initiatives, Netsmart revenues nearly tripled, and it continues to have many avenues to further drive material and consistent growth."

Jean-Pierre L. Conte, Chairman and Managing Director of Genstar, commented, "On behalf of Genstar and all of our investors I want to thank Mike Valentine and the management team for their leadership and tireless efforts in building Netsmart. Genstar helps build great companies and market leaders and I am confident the company has an extremely bright future of strong growth and profitability. Genstar has a unique competitive advantage to operate at the intersection of two critical verticals within healthcare technology and software. Netsmart is a great example of our ability to leverage the talents and depth of knowledge of our investment professionals and operating partners to apply our change initiatives that build lasting value."

Mr. Valentine, said, "Genstar brought tremendous expertise and a truly differentiated approach during our partnership, and on behalf of the entire Netsmart management team we would like to thank them for their insights, focused efforts, and collaborative working relationship."

The transaction is subject to customary regulatory and closing conditions and is expected to be completed in the second quarter. Netsmart was advised by JPMorgan and William Blair.

About Genstar Capital
Genstar Capital (www.gencap.com) is a leading private equity firm that has been actively investing in high quality companies for more than 20 years. Based in San Francisco, Genstar works in partnership with its management teams and its network of operating executives and strategic advisors to transform its portfolio companies into industry-leading businesses. Genstar manages funds with total capital commitments of over $5 billion and targets investments focused on selected sectors within the healthcare, software, financial services, and industrial technology industries.

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SOURCE Genstar Capital